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The Power of BPM and RPA Combined for Automated Operations in Digital Banking

Today’s end user demands a seamless digital banking experience, an option that is easy to find these days. To stay competitive, banks and credit unions need to capitalize on any opportunity to increase efficiency and eliminate friction. Elsewhere, we’ve explored how automation is transforming banking; here we will focus on two particular tools that financial institutions have at their disposal for automating processes: BPM and RPA. Combined, these two can complement each other, removing mundane and repetitive processes from the to-do list, allowing employees to focus on areas that deliver more value. 

What Is Business Process Management (BPM)?

BPM is a method for discovering, analyzing, improving and automating current business processes used in an organization. BPM sits above whatever processes are taking place on-screen as the overall framework, transcending departments and platforms. The primary focus and goal of BPM is long-term improvements to drive efficiency and reduce costs.

Key advantages of BPM: 

  • Builds processes that are agile and ready for technical or regulatory change. 
  • Removes bottlenecks from workflows by taking an overhead view of how the business operates. 
  • Shifts focus towards the end user by taking employees’ attention away from repetitive internal tasks.
  • Encourages consistency across the organization, rather than working in silos. 

Order is important — one process must happen before the other. First, BPM puts a framework in place to analyze and monitor how a system performs. That means codifying and optimizing (as well as continually improving) the documentation, platform choice, workflows, management and upgrades and parameters for calculating ROI. Only after these processes have been standardized can robotic process automation (RPA) begin. It makes sense, as automating without a plan in place will just lead to enabling bad processes to run faster.

What Is Robotic Process Automation (RPA)?

RPA is a method for improving business automation with the use of software that emulates human interaction, which is then replaced by software robots. First, the robot observes and records human tasks, then recreates them. The advantage for the financial institutions in using RPA is to remove human error from processes that run on a daily basis, as well as taking care of low-skill tasks that consume considerable time but deliver little business value.

RPA software robots can automate any rule-based, trigger-driven process where there are defined inputs and outputs, such as:

  • Logging into systems
  • Moving files between data sets
  • Copying, entering or extracting data
  • Filling in forms
  • Engaging in chat
  • Card or loan processing

Although RPA is often spoken about in the same breath as artificial intelligence (AI), it is a subset of AI, not its equivalent. The key difference between the two is that RPA does not learn-as-it-goes in the way AI does. If there are changes to a process, the RPA bot will not incorporate the changes by itself. 

For the bank or credit union, RPA is an attractive option that requires minimal up-front investment or disruption to legacy systems; involves a low code building load; and is scalable. Unlike traditional workflow automation, where a software developer codes a process into the back-end system using application programming interfaces (API), the RPA repeats tasks visible in the graphical user interface (GUI). In simple terms, you show it what to do then let it get to work. 

Key advantages of RPA:

  • Effective for automating legacy systems that lack APIs.
  • Reduces human error.
  • Offers better resilience during peak demand periods by minimizing time spent on repetitive tasks.
  • Strengthens compliance when it comes to Know Your Customer (KYC) and Anti-Money Laundering (AML) processes (during onboarding for example).

While the goal of BPM is looking at long term-improvements, the goal of RPA is to streamline day-to-day processes. RPA is the task-based technology; BPM is the outcome-based business strategy.

How BPM and RPM Combined Impact Digital Banks and Credit Unions

While RPAs belong distinctly within the digital era, BPM is a long-established strategy that predates digital banking. In combination, however, the two can significantly improve the delivery of any bank or credit union. For example, BPM sets the foundation for the seamless updates between ATM, branch and mobile app that end users expect.

Any financial institution is involved in an ongoing push to maximize convenience, speed and accuracy. Automating processes wherever possible is essential in streamlining operations and facing down the challenge from some of the new fintech providers entering the financial services arena. 

Key advantages of BPM: 

  • Builds processes that are agile and ready for technical or regulatory change. 
  • Removes bottlenecks from workflows by taking an overhead view of how the business operates. 
  • Shifts focus towards the end user by taking employees’ attention away from repetitive internal tasks.
  • Encourages consistency across the organization, rather than working in silos. 

By setting out a road map for greater efficiency with BPM and automating tasks with RPA, banks and credit unions can deliver improvements in these areas:

Customer Onboarding

This makes for easier gathering and verification of information to stay within KYC compliance, especially when it is from multiple sources. Today’s end user doesn’t want to jump through a series of hoops or submit a stack of documentation just to unlock a banking service.

Loan and Credit Card Processing

End users are spoiled for choice when it comes to credit products, but each requires several steps of verification and a long paper trail. The quickest provider wins, so if your financial institution can speed up processing times you are better positioned compared to the competition.

Ongoing Banking Operations

Tasks such as updating customer data, applying account upgrades or arranging overdraft extension require a lot of human input but deliver very little value, making them ripe for automation. 

Risk and Compliance

Banks and credit unions always need to be audit-ready. To stay on top of regulations and be ready for new policies, they need software tools that take care of the heavy lifting. 

Financial institutions are leading the investment in automation. The core banking software market alone will be worth $28 billion by 2027. The advantage of BPM and RPA is that they account for very little of the upfront or capital investment pie. 

Integrate the Benefits of BPM and RPA

The key to extracting most value and operational efficiency from RPA and BPM is to let them complement each other. They are not competing strategies. The goal of business process management is to identify the priority areas for improvement, both in terms of lost or leaking revenue and end user satisfaction scores. BPM then sets the ambitions for what these processes could aspire to if RPA was involved. In addition, it measures and optimizes performance once RPA is deployed. 

An important concern to address is that neither BPM nor RPA is intended to completely remove the human element from banking. Far from it. A bank or credit union can have a high level of automated processes whirring away behind the scenes yet still maintain a personalized, friendly human face to the end user. 

At Lumin Digital, we can help integrate the benefits of BPM and RPA to your customized platform. Automating your processes elevates your end user experiences on the one hand, and energizes your own employees on the other. To find out how we can help your bank or credit union incorporate automation in your digital transformation strategy, request a demo today. 


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